Abstract

AbstractThis study addresses the evolving landscape of the manufacturing sector, particularly in developing nations like Malaysia, against the backdrop of the influential Industry 4.0 paradigm. The manufacturing arena, vital for economic progress, encounters heightened competitiveness and complexity, necessitating a reevaluation of strategies. The impetus behind this research is the imperative for manufacturing entities to enhance efficiency by embracing innovation as a fundamental aspect of their operational frameworks. Practices such as knowledge oriented leadership, electronic human resource management (e-HRM), and decentralised organisation structures emerge as pivotal elements to navigate the challenges presented by Industry 4.0. This study serves a dual purpose: guiding manufacturing firms in proactively preparing for Industry 4.0 and exploring the nuanced challenges associated with an aging workforce in this transformative context. Incorporating a mixed-method approach, the study initially adopts a quantitative, cross-sectional design. SPSS is employed for descriptive statistics, while Smart PLS is utilised for structural and measurement model analyses. This comprehensive methodology allows for a thorough exploration of the intricate relationships affecting Industry 4.0 readiness. In parallel, a qualitative facet was incorporated through thematic analysis, validating and enriching the findings on the impact of Industry 4.0 on urban planning derived from participant interviews. The findings emphasise that knowledge oriented leadership and eHRM are significant contributors to organisation innovation and Industry 4.0 readiness in the Malaysian manufacturing sector. Knowledge oriented leadership positively influences innovation, while e-HRM facilitates technological adoption by improving recruitment, learning, and performance appraisal systems. However, a decentralised organisational structure showed an insignificant effect on Industry 4.0 readiness, likely due to the unique challenges faced by smaller manufacturing firms. Notably, the study's findings on the varying influence of an aging workforce on Industry 4.0 readiness offer novel insights, highlighting the need for tailored workforce policies to support effective Industry 4.0 adoption. A notable contribution lies in the pioneering inquiry into the readiness of the Malaysian manufacturing sector for Industry 4.0. Identifying knowledge oriented leadership and e-HRM as crucial prerequisites for innovation and Industry 4.0 adoption, the study enriches the understanding of the intricate dynamics at the intersection of manufacturing, innovation, and Industry 4.0. Practically, the study offers actionable insights for Malaysian government officials shaping Industry 4.0 policies and stakeholders in navigating this transformative industrial era. Moreover, it will also help the stakeholders of other countries that are working towards Industry 4.0.

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